Saturday, December 9, 2000

My article titled "The Green Peril" was published on 9th December 200.

Deepak Lal sees the ecological movement as a new form of imperialism.

While the green movement claims to have the future of the planet in mind, economist Deepak Lal warned of the new imperialist threat posed by the ecological movement, particularly for the developing countries. Prof.. Lal, who is the James Coleman Professor of International Development Studies at the University of California, at Los Angeles, USA, was delivering the inaugural Julian L. Simon Memorial Lecture organised by Liberty Institute, in New Delhi, on Saturday.

The lecture attracted a wide audience, and was chaired by Dr. Montek Singh Ahluwalia, Member, Planning Commission. Dr. Ahluwalia introduced Prof. Lal as some one who never minces words. Prof. Lal lived up to that reputation.

Prof. Lal noted the parallels between utopian ideas of Marxism, Christianity and the present day environmental movements. He said, "The ecological movement is the latest manifestation of the various secular religions in the West once the Christian God died for so many with the Scientific and Darwinian revolution… … The spiritual and moral void created by the Death of God is, thus, increasingly being filled in the secular Western world by the worship of Nature." What was ironic is that "those haunted natural spirits which the medieval Church sought to exorcise so that the West could conquer its forests (see Southern), are now be-ing glorified and being placed above Man."

Prof. Lal warned that the Green movement is a modern secular religious movement engaged in a world-wide crusade to impose its "habits of the heart" on the world. He pointed out that their primary target was to prevent the economic development which alone offers the world's poor any chance of escaping their age-old poverty. This modern day secular Christian crusade has exchanged the saving of souls for saving Spaceship Earth. It needs to be fiercely resisted.

Having failed to promote their agenda through the normal political process even in developed countries, the greens are now seeking to push their agenda through various unelected and bureaucratic international agencies such as the UNEP. Their chief prize is the capture of the WTO to impose their anti-development, anti-trade platform on the rest of the world.

For instance, Prof. Lal wondered how could the developed world that consumes twenty times more energy per capita than India, expect India to slow down or even retard their energy needs in order to implement the Kyoto Protocol on climate change. He harshly criticised western environmental groups such as Greenpeace for advocating a ban on DDT in developing countries, where malarial mosquitoes continue to affect an estimated 500 million annually, when the western world itself had used it much more widely to fight the disease some decades earlier. Likewise Prof. Lal ridiculed the fear mongering over biotechnology, and argued that India should take a leaf out of the Chinese position which has made that country adopt the newer agricultural technology in a very big way.

Prof. Lal called on India and other developing countries to stand up to this insidious threat coming from the global greens. He called for India to consider withdrawing from a range of international environmental agreements and conventions, including the Basel Convention on Hazardous Waste, the Persistent Organic Pollutants Convention, the Kyoto Protocol on Climate Change, the Biosafety Convention. He felt that many of the implications of these agreements are not clearly understood, and would impose a very heavy burden, particularly on the poor.

For India, which had been a leader against the colonial era, must once again take the lead and stand up against the latest attempt to resurrect a new form of western colonialism - ecological imperialism, concluded Prof. Lal. And in this fight, there would be allies in the west like the late Julian Simon.

Prof. Lal's lecture, "The New Cultural Imperialism: The greens and economic development", has been published by the Liberty Institute, and was released on this occasion.

Prof. Lal began by recounting his association with Prof. Julian Simon in the 1980s. Prof. Julian Simon, in whose memory this lecture series was inaugurated, was an economist and demographer at the University of Maryland in the US, and was singularly responsible for exposing the fallacy behind the Malthusian fear that growing human population would degrade the environment and the quality of life. Simon held, " The standard of living has risen along with the size of the world's population since the beginning of recorded time. There is no convincing economic reason why these trends toward a better life should not continue indefinitely… … … Minds matter economically, as much or more than, hands or mouths."

Prof. Simon was instrumental in helping to establish the Liberty Institute as an independent, economic policy research and educational organisation, in 1995. Prof. Lal has been on the board of advisors of the Institute since its inception. Since his untimely death in 1998, the Institute has rededicated its research centre in the name of Julian L. Simon to keep alive in the Institute his never-ending spirit of inquiry.

The Instituted hosted a lunch following the lecture and discussion. The participants had an opportunity to interact with each other informally. Deepak Lal signed copies of his lecture for some members of the audience.

Sunday, July 16, 2000

Recently, a dozen tigers died under mysterious circumstances over a span of a few days at the well known Nandankanan Zoo in Bhubaneswar. While the threat to the tigers in the wild is well recognised, the condition of the tigers in zoos across the country need to looked in to as well. In this article "Let the tiger earn its stripe" published in the Hindustan Times, on 16 July 2000, I note that a highly valuable animal like the tiger could well earn its keep, if we look for more creative strategies to help protect it.

The king of the jungle has been on the run for some time now. And the chase to save it has also been on for a while. Yet tragedies like the one at Nandankanan happen making it worse for the majestic animal.

There may be a case here for changing tack a little and throwing open the conservation effort to money, market and commerce.

There are estimated to be only 7-7,500 of them left in the wild, about four or five thousand of them in India. Another couple of thousands may be in captivity in zoos and circuses around the world. Sadly, the death of a dozen tigers at the Nandankanan Zoo in Bhubaneswar, has brought home the fact that even in zoos, the last refuge for some of the wild and endangered species, the animals are no longer safe. Unless serious lessons are drawn and drastic reforms in management of zoos, as well as changes in the Wildlife Protection Act, are initiated, the days of the tigers and many other wild animals in India will be well and truly numbered.

The Nandankanan tragedy calls for a serious review of the policies governing zoos in the country. Rather than trying to pin responsibility on some particular official at Nandankanan Zoo, or the Central Zoo Authority (CZA), we need to focus on the system responsible for the tragedy.

The issue here is our whole approach to wildlife conservation.

Today, zoos, with the support of modern science and technology, and growing concern about the fate of dwindling population of wild animals, can and must play a much more significant role. Zoos can become centres of specialised research in wildlife, developing expertise in captive breeding of endangered species, while continuing to be popular tourist spots. Many of the famous zoos around the world are already engaged in this kind of knowledge-based activities. They raise funds, generate revenue and attract some of the best talents to work with them.

But in India the zoos, which are governed by rules framed and monitored by the Central Zoo Authority, since 1991, have not even started in that direction. In fact, because the tiger and many other wildlife species are considered priceless, laws have been enacted to prohibit any economic use of these species. It is felt that economic utilisation of wildlife will push the species further down the road to extinction. Consequently, the laws have foreclosed the possibility that commercialisation may actually be conducive to conservation. Almost three decades of WPA has shown that stringent laws have not achieved their objects. Despite adding more and more animals to the highly protected Schedule I list, the number animals in the wild has not shown any appreciable increase and in fact it has declined in some cases.

Yet, consider the evidence of the most exploited species in the world today — cattle, sheep, poultry and other farm animals. These are nowhere near extinction. Millions are bred, sold and killed each year and have made a significant contribution to the economy. In many countries, some of the exotic wild species like crocodile, ostrich, deer, have become valuable economic products and have actually moved away from extinction since.

But Indian laws have prevented people from capitalising on the economic demand for wildlife. Captive breeding of endangered species would have been a good way to regenerate dying species. The government despite its good intentions has to put the brakes on it for pragmatic considerations. But WPA has ensured that private experimentation with captive breeding remains a non-starter as the Chennai Crocodile Farm episode shows.

The Farm has been extremely successful in breeding crocodiles and providing alternative economic opportunities to some local tribals, yet the government has for years been refusing to grant it permission to sell its animals and generate income. This is despite the fact that crocodile farming has become big business in countries like Australia, South Africa and United States. Indeed, such has been the effect that, many crocodile farmers in the west have been trying to promote crocodile meat as an exotic delicacy.

Species such as tigers also have enormous economic potential when alive in forests and wildlife parks. Tourists, who come to see these animals in their natural setting, help boost the local economy. In Zimbabwe, villagers in many areas are given ownership rights to many wild animals and share in the income brought in by tourists and hunters to see or shoot a limited number of animals. So they ensure the wildlife of their area is protected.

In India however, there is a strong move to stop tiger shows in some National Parks as such shows are cruel and deprive the tiger of its “wildness”. When the chief minister of Madhya Pradesh expressed a view that limited hunting could be permitted of some of the abundant species in the State to attract tourists, he came in for widespread criticism.

The animal rights politics in India has gone to ridiculous extents as ostrich farming project has shown. It was a foreign bird and not an endangered one at that by the international standards of the CITES agreement. It was not a protected bird under any Indian law. Yet it took the Commerce Ministry years to okay a few projects for farming of the bird for commercial purposes.

There are many species that have made a comeback on the back of commerce. Various species of deer have found increasing acceptance on dinner tables as well on the walls of trophy hunters. There are more blackbucks in Texas today, than in their native India. American bison population has jumped from a few hundred at the turn of the century to close to half a million today. Ranchers are trying to develop a market for their meat and hide in order to improve their economic potential.

With economic interest, of course, comes the motivation to deploy and train the people and harness modern technology to ensure that the animals are kept in best of conditions. The economic power of animal husbandry was seen in action a few years ago, when millions of cattle in Europe and poultry in Asia were killed because of suspected infection. Yet, the industry and the population at large did not feel any effect.

Likewise, zoos can be the vanguard for preserving wildlife. But for that to happen, laws need to be changed to allow the harnessing of the economic potential of wildlife in myriad forms. Many zoos then will become economically viable, and able to function as an efficient corporate entity providing their knowledge and services to wildlife managers and farmers. The wildlife in turn will then receive the best protection and thrive in their environment.

One cannot help but think that for many people, bureaucrats and activists alike, there is a vested interest in continuing the crisis facing wildlife. But unless we quickly realise the value of commerce in conservation, the fate of wildlife, whether in the wild or in captivity in zoos will continue to hang in balance. It is time to act or the tragedy of the Nandankanan tigers will only turn into a greater farce.

Wednesday, July 12, 2000

Following the tragic death of a dozen tigers in the Nandankanan Zoo in Orissa, I contributed this article to the Spotlight programme on the Conditions of Zoos in India, broadcast by the All India Radio on 11 July 2000.

The death of a dozen tigers at the Nandankanan Zoo in Bhubaneswar, has shocked the world. There are estimated to be only 7-7,500 of them left in the wild. Another few thousands may be in captivity in Zoos and circuses around the world. Sadly, even Zoos, the last refuge for some of the wild and endangered species is no longer safe for the animals. Unless serious lessons are drawn and drastic reforms in organisation of zoos, as well as changes in the Wildlife Protection Act, are initiated, the days of the tigers and many other wild animals in India will be truly numbered.

However, the response to this tragedy of the tigers so far has been extremely pedantic. A committee has been formed to investigate the deaths. And according to one newspaper report, the committee reached its verdict within a day of arriving at Bhubaneswar. It reportedly found that the diagnosis was correct, though perhaps initiated late, and has absolved everyone concerned of any responsibility.

This tragedy of the tigers calls for a serious review of the policies that guide the zoos. Rather than trying to pin responsibility on some particular official at Nandankanan Zoo, or the Central Zoo (Authority), we need to focus on the system that made the tragedy possible. At issue here is our whole approach to wildlife conservation.

Today, zoos, with the support of modern science and technology, and growing concern about the fate of dwindling number of wild animals, can and must play a much more significant role. Zoos can become centres of specialised research in wildlife, developing expertise in captive breeding of endangered species, while continuing to be among the popular tourist spots. Many of the famous zoos around the world are already engaged in these kind of knowledge based activities. They raise funds, generate revenue and attract some of the best talents to work with them.

In contrast, as was seen from the Nandankanan experience, even major zoos in India have difficulty in following the stated guidelines about maintaining the animals in healthy environment. Most zoos lack manpower, training and equipment. Pressure on finances mean that in many instances animals get less than their required diet. Medical facilities are quite inadequate. As one zoo director was quoted recently, "in a country where many hospitals do not have sophisticated equipments for the treatment of human beings, you cannot talk too much about animals."

Already some people think that too much attention and money is being spent on animals like tigers, than people. One estimate says that Central and State governments may have spent upward of Rs 25 lakhs, perhaps closer to Rs 50 lakhs, per tiger in the country in the past twenty-five years. And after all that effort we have perhaps less than five thousands of them left in India today.

In fact the biggest irony is that despite their endangered status, zoos have a standing direction not to breed too many tigers. Being in the cat family, tigers are easy to breed in captivity. But since an adult tiger needs about 10 kgs of meat a day, the animal becomes too expensive to maintain.

The problem is that tiger and many other wildlife species are considered priceless, and laws have been enacted to prohibit any economic use of these species. It is felt that economic utilisation of wildlife will push the species further down the road to extinction. Consequently, the laws have foreclosed the possibility that commercialisation may actually be conducive to conservation.

Consider the evidence though. The most exploited species in the world today are the cattle, sheep, poultry and other farm animals. Yet, these are nowhere near extinction. Millions are bred, sold and killed each year and have made significant contribution to the economy. In many countries, even some of the exotic wild species like crocodile, ostrich, deer, have become valuable economic products. And have moved away from extinction. But Indian laws have prevented people from capitalising on the economic demand for wildlife.

We are concerned about the death of these 12 tigers, but turn a deaf ear to the suffering of say, crocodiles in a Madras park. The park has been extremely successful in breeding crocodiles, and providing alternative economic opportunities to some local tribals, yet the government has for years been refusing to grant it permission to sell its animals and generate income. This despite the fact that crocodile farming has become big business in countries as diverse as Australia, South Africa and United States.

Species such as tigers also have enormous economic potential when alive in forests and wildlife parks. Tourists, who come to see these animals in their natural setting, help boost the local economy. In Zimbabwe, local villagers in many areas are given ownership rights to many wild animals, and share in the income that tourist and hunters pay to see or shoot a limited number of animals. And because of this economic interest, the local population take an active interest in maintaining the population of wildlife in their areas.

With economic interest, of course, comes the motivation to deploy and train the people and harness modern technology to ensure that the animals are kept in best of conditions.

Likewise, zoos can be the vanguard for preserving wildlife. But for that to happen, laws need to be changed to allow harnessing the economic potential of wildlife in myriad forms. Many zoos then will become economically viable, and able to function as an efficient corporate entity providing their knowledge and services to wildlife managers and farmers.

The wildlife in turn will then receive the best protection and thrive in their environment. Unless we realise the value of commerce in conservation, the fate of the wildlife, whether in the wild or in captivity in zoos will continue to hang in balance. Otherwise the tragedy of the tigers will only become a greater farce.

Tuesday, July 11, 2000

My article titled "Tragedy of the Tigers" was published on July 11, 2000

The death of a dozen tigers at the Nandankanan Zoo in Bhubaneswar, has shocked the world. There are estimated to be only 7-7,500 of them left in the wild. Another couple of thousands may be in captivity in Zoos and circuses around the world. Sadly, even Zoos, the last refuge for some of the wild and endangered species is no longer safe for the animals. Unless serious lessons are drawn and drastic reforms in organisation of zoos, as well as changes in the Wildlife Protection Act, are initiated, the days of the tigers and many other wild animals in India will be truly numbered.

However, the response to this tragedy of the tigers so far has been extremely pedantic. A committee has been formed to investigate the deaths. And according to one newspaper report, the committee reached its verdict within a day of arriving at Bhubaneswar. It reportedly found that the diagnosis was correct, though perhaps initiated late, and has absolved everyone concerned of any responsibility.

This tragedy of the tigers calls for a serious review of the policies that guide the zoos. Rather than trying to pin responsibility on some particular official at Nandankanan Zoo, or the Central Zoo (Authority), we need to focus on the system that made the tragedy possible. At issue here is our whole approach to wildlife conservation.

Today, zoos, with the support of modern science and technology, and growing concern about the fate of dwindling number of wild animals, can and must play a much more significant role. Zoos can become centres of specialised research in wildlife, developing expertise in captive breeding of endangered species, while continuing to be among the popular tourist spots. Many of the famous zoos around the world are already engaged in these kind of knowledge based activities. They raise funds, generate revenue and attract some of the best talents to work with them.

In contrast, as was seen from the Nandankanan experience, even major zoos in India have difficulty in following the stated guidelines about maintaining the animals in healthy environment. Most zoos lack manpower, training and equipment. Pressure on finances mean that in many instances animals get less than their required diet. Medical facilities are quite inadequate. As one zoo director was quoted recently, "in a country where many hospitals do not have sophisticated equipments for the treatment of human beings, you cannot talk too much about animals."

Already some people think that too much attention and money is being spent on animals like tigers, than people. One estimate says that Central and State governments may have spent upward of Rs 25 lakhs, perhaps closer to Rs 50 lakhs, per tiger in the country in the past twenty-five years. And after all that effort we have perhaps less than five thousands of them left in India today.

In fact the biggest irony is that despite their endangered status, zoos have a standing direction not to breed too many tigers. Being in the cat family, tigers are easy to breed in captivity. But since an adult tiger needs about 10 kgs of meat a day, the animal becomes too expensive to maintain.

The problem is that tiger and many other wildlife species are considered priceless, and laws have been enacted to prohibit any economic use of these species. It is felt that economic utilisation of wildlife will push the species further down the road to extinction. Consequently, the laws have foreclosed the possibility that commercialisation may actually be conducive to conservation.

Consider the evidence though. The most exploited species in the world today are the cattle, sheep, poultry and other farm animals. Yet, these are nowhere near extinction. Millions are bred, sold and killed each year and have made significant contribution to the economy. In many countries, even some of the exotic wild species like crocodile, ostrich, deer, have become valuable economic products. And have moved away from extinction. But Indian laws have prevented people from capitalising on the economic demand for wildlife.

We are concerned about the death of these 12 tigers, but turn a deaf ear to the suffering of say, crocodiles in a Madras park. The park has been extremely successful in breeding crocodiles, and providing alternative economic opportunities to some local tribals, yet the government has for years been refusing to grant it permission to sell its animals and generate income. This despite the fact that crocodile farming has become big business in countries as diverse as Australia, South Africa and United States.

Species such as tigers also have enormous economic potential when alive in forests and wildlife parks. Tourists, who come to see these animals in their natural setting, help boost the local economy. In Zimbabwe, local villagers in many areas are given ownership rights to many wild animals, and share in the income that tourist and hunters pay to see or shoot a limited number of animals. And because of this economic interest, the local population take an active interest in maintaining the population of wildlife in their areas.

With economic interest, of course, comes the motivation to deploy and train the people and harness modern technology to ensure that the animals are kept in best of conditions.

Likewise, zoos can be the vanguard for preserving wildlife. But for that to happen, laws need to be changed to allow harnessing the economic potential of wildlife in myriad forms. Many zoos then will become economically viable, and able to function as an efficient corporate entity providing their knowledge and services to wildlife managers and farmers.

The wildlife in turn will then receive the best protection and thrive in their environment. Unless we realise the value of commerce in conservation, the fate of the wildlife, whether in the wild or in captivity in zoos will continue to hang in balance. Otherwise the tragedy of the tigers will only become a greater farce.

Monday, June 5, 2000

June 5, is World Environment Day. This is a good occasion to look at some of the impacts of environmentalism on the people. This article looks at the widening divide between the environmental crusaders and ordinary citizens. A shorter version of this article titled "Let them eat cake or air!-Green Crusade Against the People" appeared in The Economic Times newspaper on June 5, 2000.

This famous statement supposedly made by Marie Antoinette, the Queen of France over two centuries ago, has come to symbolise the divide between the elite and the influential on the one hand and the common man on the other. The current battle in Delhi to clean the city's air has once again brought to light this age-old divide.

Let's look at some facts. Over a quarter of this capital city's population about 12 million live in slums. Between a third to almost forty percent of the population do not have access to clean drinking water and sanitation facility. Yet for over two years, the issue that has caught the fancy of the city's elite is cleaning the air, particularly vehicular pollution. And this is in a country of one billion people, with less than 40 million vehicles in all, and one of the lowest vehicle densities in the world.

Clearly, the city's elites - the activists and the NGOs, the judiciary, the bureaucrat and the politician - have donned the green hats. And of late there have been some reported improvements in the air quality in Delhi. Ironically, this green crusade seems to have hit the poor most. The very people who are engaged in a daily struggle for two square meals and clean water and sanitation, are being offered clean air as a healthy alternative.

To have some understanding of this green divide, it is necessary to look at the difference between the crusading elite and their less fortunate fellow citizens. It is fair to assume that none of the concerned elite have to bother about their next meal, nor water or toilets or housing or transportation or electricity. Naturally, their focus is now on cleaning the air.

The first target was the dilapidated public transport system of buses and three-wheelers. The prescription was to retire the older vehicles. The green elite, of course, is not dependent on the public transport. It is the common man who has to wait that much longer for a bus or try to squeeze into a already overloaded bus.

It is not far fetched to suggest that perhaps the same improvement in air quality would have been achieved if a suitable number of personal vehicles were taken out of service. But such a move would have affected the green elite, the rich and influential the most. How typical it is for the elite to preach the virtues of public transport, when they themselves don't depend on it, and have done all in their power to actually destroy it. How natural it is to abuse the consumerist life styles, and the personal automobile culture, while doing everything possible to make it impossible for most of their fellow citizens to enjoy some of the pleasures of that life-style.More importantly, vehicular emission is not just a function of old vehicles or even the total number of vehicles. It is also depended upon the distance traveled, congestion, quality of the roads, overloading, quality of the fuel, quality of vehicles and other factors. Fewer vehicles could mean more number of trips to carry the same number of passengers, or overloading, along with all the other factors, might in fact add to the levels of pollution.

So the question is why do old vehicles stay on the road? What are the policies that have contributed to aggravating vehicular pollution?

For instance, the license and permit raj severely throttled the automobile industry, reduced competition, and ensured that the manufacturers had hardly any incentive to improve the performance of their vehicles. The taxation policy further increased the cost of vehicles. This made replacement of older vehicles more prohibitive.

The same approach is reflected in the nationlised petroleum sector. First, the public oil companies had no interest in providing cleaner fuel, and secondly, have shown little interest in tackling the problem of adulteration of fuel. The fuel pricing policy also contributed to the problem. Subsidising kerosene and diesel and taxing petrol not only encouraged adulteration, but is also at the root of the current controversy over increasing dieselisation of even passenger cars in India.

It is amazing that even the NGOs tend to see this as a turf war between the petrol and diesel vehicle manufacturers, rather than the policy framework that have lead to this situation in the first place.

There is no doubt that without the distortions in the pricing of petrol, diesel, and kerosene, there would have been no demand for diesel versions of even passenger cars, and little incentive to adulterate the fuels. Second, an automobile sector open to competition and imports, would be forced to improve the quality of vehicles. Thirdly, eliminating taxes and tariffs would have gone a long way in introducing world class vehicles to Indian consumers at a much lower price. Fourthly, free import of even second hand vehicles would have greatly helped in retiring older and generally more polluting domestic ones. Fifth, a larger domestic market for vehicles would have made manufacturing more economic, and India could have become one of the leading bases for exports. And finally, better vehicles would have lowered the levels of pollution.

It is not surprising that many existing vehicle manufacturers are not keen to see greater competition. But even the green elite has mostly promoted utopian solutions whose only contribution has been to add to the drain of the public exchequer. In the 1980s, it was electric vehicle. Today, Delhi perhaps has the dubious distinction of hosting a number of graveyards for the discarded battery-buses. Undeterred, today they are championing the cause of CNG fuelled vehicles, blissfully ignoring the safety, performance, costs and even environmental aspects of these vehicles. Others are justifying white elephants like a new metro system on the ground that urban public transportation cannot but be subsidised. They seem oblivious of the fact that if the public road transportation system is at all functioning despite all the policy obstacle, it is because much of it is still in private hands. In fact such subsidies to already rich urban areas only increase the attraction of these areas and in the long run compound the problem of congestion and pollution.

Instead of taking a fresh look at transportation policies, we have continued to strangle the public transportation system which is the lifeline of the overwhelming majority of the people. The ruling elite generally believed that trade and transportation are quite superfluous for the masses. This is reflected in the high cost of transportation as well as the high emission levels. The poor quality of the roads only add to these costs.

The problem is of course not restricted transportation alone. Land use policy, restraints on housing and construction, rent control, property taxes, bottlenecks in infrastructure sectors, all have in one way or other contributed to substantially escalating the cost of living in cities, forced a large number of people on to the margins and slums, and of course contributed to environmental degradation. This is the reason many people are forced to live in one out-skirt of the city, and travel to the other end for work each day. Others opt to live in congested neighbourhoods. The result is congestion, pollution and waste of time. And as always the general public and particularly the poor have to bear the brunt.

Perhaps the gulf between the green crusaders and the common man is best illustrated in their respective attitude to cities like Delhi. The former castigates the urban metropolis for environmental, economic and even moral degradation. The latter vote with their feet and move in to the city by the thousands each day in the hope finding an opportunity to improve their lot.Let us hope that the green elite of today would not share the fate that befell the French Queen, for exhorting the people to survive on clean air and empty stomach. The green crusaders have a real opportunity to argue for lifting the burden of decades of misguided economic policies that have impoverished the people and inevitably degraded parts of the environment.

It is time to realise that environmental quality is like any value-added product. An open market induces competition and provides the incentive for development of newer and better products to attract the attention of consumers. Economic growth makes these products affordable, and offers consumers a wider range of choices. It is time for the green crusaders to end their war on the people and embrace the market.

After all, it is not vehicles, but policies that sustain low performance vehicles, inflate the costs of transportation, promote congestion, that are responsible for pollution. And this is the handiwork of the same elite who in an earlier socialist incarnation contributed to the massive wastage of human and natural resources, and are today vying to don the green mantle. It is not a coincidence, therefore, that cities such as New York, London, or Tokyo, all of which have many more automobiles on their roads than Delhi, also happen to have a better air quality.

It is time to exorcise the ghost of Marie Antoinette. It is time to regard all our fellow citizens as equal. It is time to free the people from the shackles of political and economic controls. Because the bottom line is to the extent a citizens in a country have the freedom to pursue their own interests, to that extent people have the opportunity to improve their own lot, and to that extent they can afford a better natural environment.

Sunday, May 28, 2000

May 31 is the World No-Tobacco Day. In recent months World Bank and the World health Organisation have led an orchestrated attack on tobacco in the name of public health concerns. The following article seeks to estimate the costs of this onslaught, and finds that what is at stake is individual liberty, personal preference and responsibility. A version of this paper titled War on "Tobacco: At the Cost of Liberty" was published in The Telegraph newspaper of Calcutta, on May 28, 2000. Earlier in the month, Liberty Institute released a book, War on Tobacco: At what Cost? It has two contributions, one by Prof. Deepak Lal, and the other is by Roger Scruton.

The greatest political achievement of the 20th Century has been the empowerment of the citizen. It has been generally accepted that despite its many flaws, there is no better political instrument than democracy to enable the people to participate and decide how they should be governed.

However, in parallel to this development there have been continuous attempts to restrict people's choice in the name of preserving public morality, health, economic well being, and now the environment. Clearly it has not been easy for the ruling establishments to recognise that if people have a legitimate say in choosing their representatives, then they have all the more right to decide on their personal preferences. Particularly if in the exercise of those preferences no one else is hurt, and the person bears the cost of making that choice.

Time and again it has been seen that the cost the society has paid for the proclivity of the elite to control has far outweighed the supposed benefits. Yet, insidious attempts are made again and again endangering the political and economic freedoms that the common man has fought hard and won after many millenniums of struggles. As we enter the 21st Century, these self-proclaimed benefactors pose the greatest threat to individual freedom and wellbeing.

The growing intensity of attack on tobacco, ostensibly on grounds of public health, is but another manifestation of the insidious assault on individual preferences.

It is well known that the misguided constitutional amendment to impose prohibition in the United States in the 1920s, not only failed to curb alcohol but inevitably fuelled crime. The fate of successive governments in India also bears testimony to financial and social costs of similar policies.

In the sixties, the Indian government had the gold control law that virtually prohibited international trade. It is now open secret that this policy was singularly responsible for the growth of international smuggling. Today, those very channels created to subvert the gold regulations are being used to send in weapons and RDX explosives that are threatening political fabric of the country.

The cost of "war on drugs" launched by the United States has been rising constantly, both monetarily and socially. The prison system in the US is overflowing with alleged drug offenders. And yet with all the billions of dollars spent on this war, the promised victory is nowhere in sight. Indeed, some of the governments in Central and South America are being increasingly marginalised by the drug mafia in spite of the money and material being poured in by the US, threatening the social fabric of these societies.

Good intentions of do-gooders are never a sufficient condition for bringing about social change. The do-gooders claim to make life safe and free of risks. Only a prison may hope to provide such safety, and even that is no longer assured.

Life is about taking risks, and coming out on top. Another name for that is private enterprise. But naturally, enterprise is anathema to all control freaks.

Lets look at our own history. Drugs and alcohol have been a part of Indian culture and tradition from time immemorial. Yet, there was no evidence of any collective decay or degeneration on account of this. Nevertheless, today we are a democracy with universal adult franchise. The underlying principle being that every voter irrespective of his or her social, religious, economic or educational background possesses the basic wisdom necessary to meaningfully participate in the decision making process of the country. Yet, at the same time these do-gooders think that these very people are incompetent to decide on issues that directly affect their lives - drugs, alcohol, tobacco, lottery, foreign media.

No doubt, there will always be some people who will make a wrong choice. But the society as such undoubtedly comes out much stronger from such experiences. That is why no such control measure was every necessary in past.

International agencies like the World Health Organisation have been trying to rally support for their crusade against tobacco. Lets look at some of the other issues that are supposed to be WHO's prime focus. Lack of clean drinking water and hygienic sanitation facilities, malaria and all the other avoidable diseases continue to wreck havoc on many parts of the world, including India. But focussing on those would mean holding the one factor responsible for these - the role or lack of it played by the various governments. And of course, WHO is made up of national governments. How much more convenient, therefore, it is to hold the common man on the street, who are struggling for his basic survival, responsible for his own alleged follies.

Not surprisingly, WHO and the like are motivated by costs, particularly the costs to the state health service. But the costs and inefficiencies of the health service should lead to a call for its denationalisation, private participation and introducing competition. More importantly, the role of the state health sector is quite marginal in countries like India. A vast majority of population, rich and poor alike (unless one is well connected) prefer the private facilities and even quacks, to the humiliation and indignity offered at most government clinics.

Openness and participation have been great buzzwords at recent international jumborees in recent years. Yet, we don't see the activists and the NGOs on the streets against attempts to control people's preference for tobacco. The reason being that most of these self proclaimed representatives of the people are control freaks themselves and see the WHO as carrying the same candle. They see the WHO's attempt to control health care, and restraints on individual freedom, as a means of legitimising their own agenda for control on a whole range of issues - economic and political.

Clearly, this desire for control posses the greatest threat to individual freedom, dignity and choice in the new century. And the voice of true protest at this insidious subversion is growing around the world. Eminent personalities such as the Nobel Laureate economist Milton Friedman have called for an end to war on drugs. Popular movements are spreading in many parts of the world forcing the governments to go slow on that war or even consider legalising certain drugs.It will be a real pity if under the aegis of WHO, a new "war on tobacco" is launched even as the previous one is collapsing. The ominous consequence of this new war can already be seen in increasing reports of smuggling of cigarettes across the border in to Canada from the US.Of course, cigarette is not even main issue in India. Tobacco in the form of the humble beedi, and various forms of chewing tobacco constitute one of the most simple and perhaps only forms of pleasure that is accessible to millions in India and other developing country.

These are the very people who have had to bear the burden of failed government economic policies, and unresponsive and indifferent administrations. But thanks to our democracy, there is probably no political leader brave enough to go out and tell these people that if elected they will send out the police to sniff out tobacco from their homes. Exactly, the same reason why we see our elite talk bravely about the need for population control, but no one dares to do anything about even after a 25 years of Mrs. Indira Gandhi's ill-advised bravado. Agencies such as the WHO provide a very good cover to push for control that will other wise never receive popular mandate.There is no denying that tobacco carries a degree of risk. But life itself is full of risks and uncertainties. Indeed, it is the attempt to lower some of the risks and overcome some of the uncertainties that contribute to improving the general quality of life. In the process giving real meaning to life.

The question, therefore, is who should to bear the cost of taking the risk? Should he be allowed to force others, who are not so inclined, to accept some of the risks on his account. In the context of tobacco, the obvious question is about passive smoking.

According to economists these are problems of externalities, particularly caused by market failures. To ensure the supply of public goods, it is argued, the regulations are necessary to induce private operators in the market to behave in a responsible manner.

It is often forgotten that people have been devising various strategies to deal with such situations for a long time. Even without going in to science of whether and to what extent passive smoking may be harmful, one can site many instances where people have devised voluntary responses to similar situations.

For instance, eateries and restaurants in India routinely publicise their "pure vegetarian" or "non-vegetarian" status, depending on the clientele they seek to attract. Many also have add-on features such as ban on alcohol or cigarettes. Depending on the nature of their passengers, many privately operated chartered bus services in Delhi, often charge extra for qualities such as smoke free rides or allowing smokers. The demand from smokers has induced some international airlines to offer special flights. The power of private negotiation best comes through reported instances where passengers sitting at the border zone of smoking and non-smoking seats in airlines have stuck monetary deals to induce a neighbouring smoker not to light up during the flight.

These illustrations of amicable settlement of private preferences over so-called public domain contrasts sharply with the performance of the public regulations. For instance, in Delhi a law was passed giving powers to wide range of government officials to arrest smokers in an attempt to restrict smoking in many designated public and private (deemed public) places. In over two years since its passage, there has been no report of any prosecution. This implies, that either the law has achieved its objective, or, more likely, that it has been so grossly violated that it is impossible for the public authorities to seriously try to prosecute a violator.

Tobacco regulations are an attempt to drag to the public domain what is essentially a private issue. With the collapse of socialism, the enormous economic costs of trying to allocate resources by bringing private property under public control has been fully exposed. A much more efficient way is to bring under private control much of what is thought to be in the public domain - privatise the public goods.

One of the biggest advantages of this approach is that one may bypass the whole issue of evaluating scientific evidence for and against tobacco. Consequently, science doesn't get politicised under the pressures of public policy making. Likewise, public policy doesn't get embroiled into scientific debates, and instead focus on ensuring maximum space to the public so that everyone can negotiate their respective preferences. That is what an open market provides.The refusal of many public agencies and activists to explore the non-regulatory approaches to the tobacco debate actually exposes their real agenda. The need to create an environment of crisis in order to justify their regulatory controls. Clearly, the issue of public health is a façade to camouflage the restrictions on freedom of choice, curbing individual preferences those regulatory controls invariably imposes.

In a dynamic and competitive economy, companies and even industries come and go. And there is no reason to shed any tear for the tobacco industry if it fails on economic reasons or because of changing consumer preference. But the orchestrated assault on tobacco national and international agencies is not just an attack on one particular industry. This is an attack on individual freedom and liberty. It is time to call the bluff before in the name of public health the world is turned in to a living hell. Clearly, the cost of the war on tobacco is too high.

Thursday, May 11, 2000

At noon on 11 May 2000, Aastha, a baby girl born in Delhi. She was officially declared as the billionth Indian.

My article titled "India's One-Billionth Asset-The path to prosperity is economic freedom, not population policy" was published in May, 2000.

India's population officially surpasses the one billion mark today. While government officials search for the suitable baby to herald the occasion, there are no plans for any grand birthday party. Instead people are being somberly reminded of the burden of the billion plus population.It is ironic that India has reached a situation where the birth of a child is considered to have a negative impact on GDP and other economic measures, but the birth of a calf, or production of an additional ton of rice or iron is considered to be positive.

Is India's growing population to blame for its relatively poor economic performance in the past 50 years? Or did the policies pursued by successive governments lead to a massive waste of resources -- including human resources -- and seal the fate of so many in abject poverty?Clearly, it is the economic policies that have failed, and population has come along as a convenient bogey to hide the policy failures. Indeed, population policy has become a weapon of war against the people themselves, placing the blame on the victims -- the poor -- for India's massive poverty.

The government argues that India's natural resources are simply inadequate to meet the needs of growing numbers of people. But as economists such as the late Julian Simon have pointed out, prices of virtually all major commodities have been falling. This indicates not so much a scarcity of supply in India, but an inability to utilize these resources efficiently due to misguided policies.

Foremost among these have been restrictions on trade. When the British left in 1947, India's share of global trade was about 1.5%. Today it is just 0.7%. Trade was considered incidental to development. Leaders chose to ignore the fact that, just as democracy empowers the people by allowing them to make choices in the political domain, trade empowers them by expanding the range of choices in the economic domain.

Having forsaken the road to empowerment, the state adopted a system of licenses, permits and quotas allegedly to promote planned all-round development and ensure the equitable distribution of resources. The result has been over-centralization, corruption, waste and poverty.

Now some small steps have been taken to liberalize the economy and free the people froom the shackles of state regulations. However, it is not easy for vested interests to give up their privileges. So we still see attempts to resurrect the issue of population growth in order to justify statist policies.

It is claimed that increasing population places unsustainable demands on the environmental resources, and therefore restraint on population is necessary to preserve the health of the nation and the planet. Of course, there has been some significant environmental degradation alongside economic growth. But more often than not, this is due to the failure to bring environmental resources under the discipline of market forces. After all, environmental quality is like any other value-added product. -- economic development alone makes it affordable.

Liberalization and globalization provide the best opportunity to the poorest of the people to escape the clutches of both domestic tyrants and failed policies. So recent protests, particularly in the West, against liberalization and globalization in the name of the poor can at best be misinformed -- at worst racist.

Recurring themes at these protests have been the claim that the present levels of consumption is inequitable, since barely 20% of the population consumes about 80% of the resources, and that these levels of consumption are unsustainable, since the global environment may collapse if all the Indians and Chinese aspire to the consumption patterns of the developed countries.

Maintaining the status quo and requiring those who in any case have very little to consume, can only help perpetuate the gap between the haves and the have-nots. Some intellectuals, with no political constituency, and activists sustained by constituents who don't have any concept of poverty in third world countries, can hope to get away with such iniquitous policies. But no political leader in these countries, least of all a democratic one, can escape the wrath of the people he promotes such an approach.

Nevertheless, the arguments persist and are quite widely held in influential circles in many countries. In India, of course, Indira Gandhi's misadventure into population control in the mid-1970s has made the political authorities extremely cagey about direct measures, no matter how much they might want them.

But in the last ten years, there has been as attempt to devise more ingenious ways of attacking the population problem by attacking the poor directly. In many local bodies, electoral criteria disqualify anyone with more than two children to contest a post. Such laws were also proposed at the national and state levels, but because they would have hurt incumbents the most, they never saw the light of day.

The population policy announced by the present government a few months ago promises a wide range of incentives to those who adopt the two-child norm, while doing away with the direct disincentives and penalties of the past.

While this may be seen as a sign of progress, any form of population control diverts attention from real issues of economic policies that might have made the need for a population policy redundant. In addition, the focus on fertility necessarily politicizes the whole issue.India has had a policy on virtually everything under the sun. Yet, her performance has left much to be desired. India's population policy stand as the ultimate symbol of the political elites' arrogance. More than anything else, this policy implies that a voter has political rights, but not the right to decide something so intimate as the size of his or her own family.

As we enter a new century, it is time for Indians to jettison this sense of contempt for our own people. People are not only consumers, they are also producers. Indeed, they are the ultimate resource in that they give meaning to all other resources. A population policy fails to distinguish between people and all these other resources, and therefore ends up launching a war on the very people who constitute the demographics.

Instead of framing more new policies, it is time to take a break from policy making, and give people the choice to make their own decisions -- economic, political and social. What people need is the space to harness their own enterprise and initiatives and realize their own potential. In this regard, freedom is the best policy. May be then we will be able to celebrate the arrival of the billionth Indian.

Saturday, May 6, 2000

My press release titled "War Against Tobacco threatens Liberty and Economic Development, warn International Experts" was published on 6th May 2000.

In a new book, War on Tobacco: At What Cost? international experts point out that the cost of the new war against tobacco is unacceptably high, both economically, and politically. Deepak Lal, Coleman Professor of International Development at University of California, Los Angeles, and one of the two contributors to this volume, reviews the recent World Bank report on tobacco and finds that contrary to the Bank’s claim, there are significant positive effects of growing and using tobacco.

Mr. Gurcharan Das released the book at a function on 6 May, 2000, in New Delhi. Prof. Lal summarised his paper. Dr. Shreekant Gupta of Delhi School of Economics, commented on the paper, and the meeting was chaired by Dr. Bibek Debroy of Rajiv Gandhi Institute of Contemporary Studies. There was a livey question and answer session at the end. The programme schedule of this event is available here.

In his paper, Prof. Lal, while acknowledging that tobacco use is harmful, warns against making unjust economic claims against tobacco in the health activists attempt to reduce smoking. The Bank proposes increasing taxes on tobacco, but Prof. Lal finds that the economic welfare losses from existing taxes are huge. He says, “For India, the per smoker loss from current taxation is nearly twice per capita GDP, and the aggregate loss from current and future taxation (of, say, a 10% per annum increase in taxes for 10 years) would be a massive 80% of current GDP.” The anti-tobacco crusade from the West, like the environmental one as manifested at the WTO meeting Seattle last December, is the newest manifestation of the neo-imperialistic desires.

Prof. Lal concludes that the Bank provides no cogent reasons for its crusade against tobacco in the developing world, particularly since most of the costs and benefits are privately borne in these countries. “The attempt to inflict the estimated large losses of economic welfare on poor people is wicked and shameful, when for so many of these poor the noxious weed is one of the only sources of pleasure in lives which remain nasty, brutish and short.”

The second paper in this volume is by Professor Roger Scruton, a well-known British philosopher and writer. He warns of the harms to national sovereignty of allowing the World Health Organisation to dictate global policy on tobacco. Furthermore Scruton makes an eloquent defence of smoking - The WHO has no right to tell you if you can smoke. Smoking is a choice, not a disease. Mrs Brundtland, the head of WHO is trying to become a global nanny, and to export her desires for a Tobacco Free World (through a UN style Convention), she has resorted to claiming that tobacco is a disease. Scruton is alarmed that by claiming tobacco as a disease it opens the floodgates to more conventions, perhaps on drink, drugs, cars all of which kill, the list is endless.

“In our secular age, it is more than ever necessary to safeguard the old idea of law, as a guardian of individual freedoms, rather than an instrument of enforced conformity. Wherever legislation is unnecessary it is wrong. And the decision whether it is necessary should be ours, and made through our elected legislatures”, writes Scruton. It seems ironic, that at a time when “democratisation” and “devolution” are the buzzwords, unelected and unaccountable trans-national agencies such as the WHO are formulating global legislation “in order to impose the social and political agenda of handful of activists.”

Barun Mitra of Liberty Institute, writing the foreword to this volume says that democracy empowers the citizen by giving him the freedom of choice in the political domain. By the same token it is untenable to suggest that the same citizen is incompetent to exercise the same freedom to decide on more mundane issues such as whether to smoke or not. Mitra also points out a number of instances where people have voluntarily sorted this issue without recourse to any legislation. “Depending on the nature of their passengers, many privately operated chartered bus services in Delhi, often charge extra for qualities such as smoke free rides or allowing smokers.” This is in contrast to the failure to bring in even one prosecution under the recent law in Delhi that prohibits smoking in many public and private places, although the law is observed more in the breech.

War is always painful and expensive. Clearly, the one on tobacco is no exception, but it can easily be avoided. It requires recognition of fellow human beings as necessarily equal. The message may be simple, but human history is a story of a continuous struggle to claim that equality. Let’s not add tobacco to that onerous list.

Monday, May 1, 2000

The press release titled "Population: The Ultimate Resource" was published in May 2000.

Twentieth Century has witnessed unprecedented demographic changes. For the first time in history, the world population almost quadrupled from about one and a half billion in 1900 to six billion in the span of just hundred years. Likewise, Indian population too crossed the one billion level in May 2000, from about 238 million at the beginning of the Twentieth century. This is particularly significant, since as late as the 1920s, India had experienced a slight decline in population due to poverty and deprivation.

At long last it seems that man is successfully defying death and deprivation that were constant companion of his ancestors. Infant mortality rates have fallen, life expectancy at birth have doubled or tripled, and the result is that there are more of us to enjoy life on earth as never before.

Yet, there is hardly any sign of celebrations. It is amazing that such an achievement is virtually going unnoticed. Instead all we hear is that the planet may be on the verge of collapse because of the burgeoning numbers of humans.

It is ironic that many environmentalists who would herald similar growth in population of some of the endangered species as a very good indicator of the environmental health of the planet, see the success of man as a harbinger of environmental doom. Even many economists usually consider an increase in production of steel or birth of an additional calf, as positive addition to the national output or Gross Domestic Product, but view the birth of a human child to have a negative impact on GDP.

It is indeed ironic that the birth of a human child is valued so little. After all, that baby might be a potential Tagore or Einstein, or an entrepreneur who put up that steel mill, or the farmer who nurture his land or cattle to increase its yield, or the worker who strive to increase his productivity. And it is precisely on that potential that the future of humanity depends.

Julian L. Simon

This book is dedicated to the man who thought otherwise - Julian L. Simon. He appreciated the enormous cost mankind has paid throughout history when the population is estimated to have stayed stable at a few million, and life expectancy hovered in the twenties. This made Simon aware of the true potential of man that has made him overcome such great odds.

Simon successfully challenged and helped turn on its head the centuries old Malthusian fear that a growing population will simply devour the planet, and lead to famine, disease and death of civilisation as we know it. Human population that barely crawled for millennia, suddenly tripled in the 20th century, but the world per capita output quadrupled during the same period, improving the quality of life for everyone. The best proof of this comes from the doubling or in many cases even tripling of life expectancy at birth in step with population increase.

Simon was to write later "It is your mind that matters economically, as much or more than your mouth or hands. In the long run, the most important economic effect of population size and growth is the contribution of additional people to our stock of useful knowledge. And this contribution is large enough in the long run to overcome all the costs of population growth."

Julian Simon was an economist and demographer who taught at the University of Maryland at College Park, just outside of Washington, D.C. In the 1960s he became concerned at the state of affairs and the growth of population on the planet, and wanted to do something meaningful in order to prevent the seemingly inevitable doom that awaited man. He began looking at data to see the kind of impact man has had on the planet. And he was in for a surprise.

Virtually every data he looked at, from life expectancy and infant mortality rates to health indicators, to prices of natural resources and consumption good like food items, to environmental quality, things seemed to have improved, and have been doing so for as long as one could see. Only, in the last few centuries, the improvements have accelerated even as population began to grow. Simon was convinced, "The standard of living has risen along with the size of the world's population since the beginning of recorded time. There is no convincing economic reason why these trends toward a better life should not continue indefinitely."

Simon first came in to public prominence in 1980. He took a very unusual step for an academic. He decided to place his money on the validity of his position that there is no scarcity of natural resources. He challenged any one to bet with him on prices of any natural resources. He said that if the resources were becoming scarcer, then their prices ought to rise, and he was prepared to bet that the prices would actually fall. Paul Ehrlich, a biologist and one of the foremost critics of population growth, along with a couple of colleagues, decided to take up the bet. Simon and Ehrlich agreed on five metals - copper, chrome, nickel, tin and tungsten. The bet was to be settled a decade later.

In the meantime, Simon published his masterpiece, The Ultimate Resource. He marshalled all the evidence and data and showed the long term trends. "Our supplies of natural resources are not finite in any economic sense. Nor does past experience give reason to expect natural resources to become any more scarce. Rather, if history is any guide, natural resources will progressively become less costly, hence less scarce, and will constitute a smaller proportion of our expenses in future years," he wrote. The book was completely revised and expanded in its second edition in 1996. It has now been published in over half a dozen languages. It is even available in Chinese. We hope we will have an Indian edition in the not too distant future.

The bet was finally settled in 1990. As Simon had predicted, the prices of all the metals had fallen. The fall in some cases had been so dramatic that Simon would have won even if the prices were not adjusted for inflation. Ehrlich paid up, although he claimed that the drama was not of any environmental significance. But no one ever took up Simon's standing offer again.

Simon continued teach that, "The ultimate resource is people - especially skilled, spirited, and hopeful young people endowed with liberty - who will exert their wills and imaginations for their own benefit, and so inevitably benefit not only themselves but the rest of us as well."

I had first read The Ultimate Resource in the mid-1980s. It was an eye-opener. His sense of optimism was infectious. He taught me to really appreciate the true potential of man, particularly free and independent man not chained by social customs or bureaucratic regulations. I wrote to him in 1990 after I read about the outcome of his bet. I wrote that I had not believed that any one would be foolish enough to accept such an obvious loser. That it was Ehrlich, only showed the intellectual hollowness of our opponents. We corresponded off and on, and then had the honour of being associated with some of his work. He was instrumental in introducing me to a lot of people around the world, and helped in establishing the Liberty Institute in 1995, and was a member of its board of advisors. He along with his wife, Rita, very generously travelled to India in 1997 and participated in our Freedom Workshop in Devlali (near Nasik).

Following his sudden death in 1998, we named the research section of the Liberty Institute after him. The Julian L. Simon Centre we hope will keep alive his indomitable spirit, and never ending sense of inquiry.

Simon viewed people to be the ultimate resource. He held that for their talents to flower and come to fruition, people require conducive economic and political framework that provide the incentive for working hard and taking risks. "The key elements of such a framework are respect for property, fair and sensible rules of the market that are enforced equally for all, and the personal liberty that accompanies economic freedom. In the absence of such a framework, the short-run costs of population growth are greater, and the long-run benefits fewer, than in free societies." Likewise, the primary objective of Liberty Institute is to promote appreciation of the institutional framework of a free society - individual rights, rule of law, limited government and free market.

People don't come with just a mouth, but also a mind. They are not just consumers, but also producers. This explains the apparent paradox that more we consume, more we have left to consume. Simon showed that while our number have multiplied, far from depleting the resources these have become more abundant as measured by the falling prices of almost every resources over time. The only resource whose price has been increasing consistently is that of human labour. This is the only resource which has become progressively scarce even as their numbers have grown. Because, increasing ability to consume, in a free economy, induces producers to innovate and develop newer, cheaper and better products to attract the attention of consumers. Clearly, a society that considers her people as the ultimate resource, and recognises the value of freedom will discover the key to unlimited resources.

Simon genuinely rejoiced at the potential that every new life brought. He wondered how many Michaelangelo or Einsteins would be lost to the world because of misguided preference for birth control policies. For him life was always full of promise and possibilities, and he was full of optimism that as people struggled with problem, they would make the world a better place than ever before.

Simon did not say that there were no problems. He only said that the trends were that life was getting better than before. He admired man's willingness to strive to improve further. As we enter the next millennium, and think of all myriad problems confronting mankind, we would do well to remember Simon's predictions for the coming century, "humanity's condition will improve in just about every material way." The issue will clearly continue to be debated in future just as even the ancient Greeks had worried about the possible Malthusian doom much before the arrival of Thomas Malthus himself two thousand years later. But another prediction of Simon unlikely to generate any debate is: "humans will continue to sit around complaining about everything getting worse."

The Argument

In this small volume we have sought to bring together the ideas of Julian Simon, and others who shared his basic perspective. But each of the essays seeks to bring out a different aspect. The book has four articles of Simon. The first is his speech at our Freedom Workshop in 1997. Here he outlines his basic ideas concerning population, environment and development - that more people, produce greater wealth, enjoy a healthier environment and have access to abundant resources. In a second article Simon argues in favour of immigration. In view of the periodic outburst of sentiments against immigrants from neighbouring countries, and migrants from countryside to the cities, that we experience, Simon's reasons for keeping the borders open should be of interest to readers in India. He says, "Opponents of immigration seek to persuade us that new immigrants damage society economically, politically, and culturally. Immigration restrictions are intended to "protect us" in the same way as tariffs and trade quotas. But like trade barriers, immigration restrictions largely protect us from benefits." He reminds us of the tragedy of the now defunct Berlin Wall where so many lost their lives trying to escape from tyranny at home. And in his characteristic fashion he says, "This should remind us how wonderful it is that people want to come here."

In another piece, Simon takes an unusual look at Shakespeare's Sonnet I, and finds that the bard's "vision uncannily parallels a current theory on the subject." In the poet's quest for truth and beauty, Simon finds " truth and beauty are like knowledge, and thereby like the supply of natural resources that flows from knowledge, …..our stocks of intellectual goods are not depleted by use, but will continue to enhance forever human life." This essay provides a distinctive insight in to Simon's mind, and provides a glimpse to the sense of joy the author feels as he goes about exploring new territories.

We have also included an autobiographical piece that Simon was asked to write in 1996, a couple of years before his death. In this piece Simon not only sketches his life, but also shares his philosophy. He concludes by a self-assessment, "I have lived an extraordinarily lucky life." True to this assessment, this lucky man has left the world incredibly richer.

Lord Peter Bauer, the dissident development economist, in this reprint of his 1991 essay shows why a growing population is not an obstacle to economic development. He writes, “There is ample evidence that rapid population growth has certainly not inhibited economic progress either in the West or in the contemporary Third World. The population of the Western world has more than quadrupled since the middle of the eighteenth century. Real income per head is estimated to have increased fivefold at least. Much of the increase in incomes took place when population increased as fast as in most of the contemporary less developed world, or even faster.”

Advocates of population control generally like to point at the apparent reduction in per capita availability of agricultural land. They assume that this trend has sealed the fate of mankind. However, Bauer says, "It is pertinent also that productivity of the soil in both prosperous and poor countries owes very little to the "original and indestructible powers of the soil," that is, to land as a factor in totally inelastic supply. The productivity of land is the result largely of human activity: labour, investment, science, and technology. Moreover, the factor price of land, including return on investment, is a small part of the national income in most countries; and this proportion has tended to fall rather than rise those Western countries for which reasonably reliable statistics are available. This would not be so if land were acutely scarce are acutely scare relative to other productive resources."

Deepak Lal, another renowned development economist in this updated version of his 1989 article finds that that population growth has had no impact on India's economy, particularly agriculture, and that there were other factors. To those concerned about burgeoning population and its impact on food production, Lal says, “Apart from the few Green Revolution States, much of the agricultural growth in India has been induced by population growth.” So much for Malthus.

Columnist Sauvik Chakraverti argues that population growth causes prosperity and urbanisation and free trade are suited to absorb the diverse potentials of the increasing numbers. “The proof that population causes prosperity can be condensed into four words: Urban Areas Are Rich,” writes Sauvik.

Indeed, there is a very good correlation between rates of urbanisation and economic wealth, in India as well as internationally. On the other hand, there is hardly any relationship between population density and economic wellbeing. Today, Japan and India have comparable population densities, but there is no comparison between the two economies.

Traditionally, people have always tried to crowd together in order to maximise the benefits of trade and exchange. In fact, if today's six billion people could be placed together approximating the population density of, say, Singapore (5000 people per sq. km), they would fit in to an area about one third of India. And the world would be a much richer place with abundant land and resources to sustain a cleaner, greener, and healthier world.

Nicholas Eberstadt, a political economist, identifies the ideology that has been at the root of the belief that population needs a public policy to restrain it from proliferating. He cautions, "To make the economic case for an active population policy, population planners would ultimately need to centre their arguments on estimates of the economic value of human life. They would have to show, in effect, what would be the "present value" of a child born today, and also to show how that present value would be changed by altering the size of the baby's cohort of peers, or the cohorts following." Eberstadt also points out that demographic change may assume a variety of manifestations, its form in the modern era has typically been both comparatively benign and relatively advantageous for the purposes of economic growth.

The implications of demographic change are not restricted to the economy alone. For instance although the rate of population growth is slowing, due to falling birth rates, the absolute annual increase is still near its historic high of 86 million a decade ago because there are so many women and men of childbearing age. Over 95 per cent of growth is in developing countries. Consequently, In 1960, Europe had twice as many people as Africa; by 2050 it is estimated that there will be three times as many Africans as Europeans. Asia, by far the most populous region, has more than doubled in population since 1960, as has Latin America and the Caribbean. Meanwhile, population growth has slowed or stopped in Europe, North America and Japan. The United States is the only industrial country where large population increases are still projected, largely due to immigration.

Clearly, the declining share of the European-Caucasian is likely to affect many other spheres of political and economic life. This raises the prospect of other possible agendas playing a role in shaping the debate over of population. Even The Wall Street Journal has recognised that “[T]hough the talk about reducing population is couched in terms of individual ‘freedom’ and ‘choice,’ …..the context of these choices is a world where more babies—especially yellow, brown and black babies—is thought to be a scourge that threatens the well-being of everyone.”

As Bauer says, "The central issue in population policy is whether the number of children people have should be decided by the parents or by the agents of the state." In the present era of globalisation and democraticisation, this issue assumes added significance. Because at a time when there is a general recognition of the people's freedom to choose their political representative and pizzas, or between their colas and the cars, any attempt to deny people the choice over the size of their family will heighten the anomaly.

The fundamental issue as we enter the new millennium is should we consider our fellow human beings as a resource and shape policies that protects his freedom, or should we look at our numbers and think of it as a drain on our limited resources.

In a small way, this book seeks to reopen this debate. We would achieve our aims, if these few essays help to introduce the reader to a different perspective. The human population is the ultimate resource and not the problem. Rather than blaming the people, we should look at our policies that have curbed the spirit of inquiry and enterprise, and led to the wastage of the most precious of all resources, the human mind. We hope this book will succeed in expanding the scope of the population debate. Our future and those of our children depend on it.

Wednesday, March 1, 2000

My article titled "Is Free Trade Fair Trade?" was published in March 2000.

Free trade is fair trade, or so one thought until the recent protests in Seattle during the WTO meeting. The Seattle protesters contended that unrestricted trade harms developing countries. In contrast, India's experience provides clear evidence of the high costs of a restrictive trade policy. For almost fifty years, India, the world's largest democracy, lived under the premise that trade is a zero-sum game. Successive governments believed that free trade would only weaken the Indian economy further and open it up for even greater economic exploitation.

The result of this economic experiment has been tragic but clear. In 1947, at the time of Independence from British colonial rule, India's share of global trade was estimated to be about 1.8%. Today it is less than half that. Per capita income has stagnated at less than $500, and an estimated 20-30% of the population lives in abject poverty. The Indian experience is in sharp contrast with that of many countries in South-East Asia that had started out at around the same level or worse, but in the last thirty years have leapt far ahead.

The economic philosophy behind a restricted trade regime was national self-sufficiency, and import substitution. It was argued that protecting local industries would not only help protect jobs, but also allow the industries to mature and develop, and the domestic knowledge base and technology to grow.

The results of this policy, in India and elsewhere, have been the opposite of what had been intended. The experiment failed because of fatal misconceptions about the nature of the market and the role of trade. And the cost for this failure has been extremely high. Ordinary consumers lost out, because domestic producers faced little competition, and their products were characterised by high price and low quality. Foreign goods were either unavailable or made prohibitively expensive through sky-high tariffs. Not surprisingly, the contribution of the economy to the growth of knowledge and technology was marginal.

Trade restrictions have clearly failed the citizens of developing countries. It is time to try a new policy which will promote domestic economic growth, spur innovation, and benefit consumers. There are several critical components to such a policy. They include the lifting of trade restrictions, respect for private property rights and contracts, and the assurance of freedom of choice in the marketplace. Such policies will induce competition and force producers to find better and cheaper ways of satisfying consumer demands.

To enhance the domestic base of knowledge and promote technological innovation, another essential component of a pro-growth policy is protection of intellectual property rights (IPR). The approach to IPR is another clear distinguishing factor between developing and developed countries. The former generally considered knowledge to be free and IPR as an instrument for restricting access to knowledge. The unintended consequence of this approach has been that while knowledge may be free, it has also become scarce, dated and even unavailable, as there is no incentive to invest in the discovery process.

The experience of India in this regard is quite telling. It may be argued that a lot of the traditional knowledge systems in India have decayed or died because of lack of protection for IPR. This seems particularly ironic today when there is universal concern for protecting the local knowledge base. For instance, the failure of most local pharmaceutical companies to utilise the "free" knowledge to develop new and better drugs is an illustration of the significance of IPR. IPR may limit access, but in the process eliminates the "tragedy of the commons" in the knowledge domain. IPR, therefore, provides the incentive to discover and makes knowledge affordable and sustainable.

Another aspect of trade that needs more attention is its relationship with democracy. Traders in the marketplace are like voters in a democracy. If free flow of ideas is essential to sustain political freedom and a democratic polity, then free trade is critical to sustain economic freedom and an efficient marketplace. Liberty, after all, is indivisible.

Therefore, the best way to realise the competitive advantage that an opportunity to trade provides is through universal dismantling of barriers to trade and economic growth. The evidence of prosperity is clear from the diverse group of countries that instituted domestic reforms and adopted relatively open trading systems -- to the benefit of their citizens. Their experience is testimony to the fact that, where the interests of ordinary citizens are at stake, free trade is fair trade.

My article titled "Poverty, Wealth and Waste" is Reproduced from the March 2000 issue of PERC Reports. The original pdf version of the journal is available here . PERC, a think tank based in Bozeman, Montana, USA, is dedicated to Providing Market Solutions to Environmental Problems.

In 1986, a waste-to-energy plant opened in Delhi, India, financed by the Danish International Development Agency at a cost of over $10 million. The plant was expected to generate 3.8 mw of electricity from garbage, and its success was to be copied in other Indian cities. However, the plant was a failure. Two years later, the government was spending about $100,000 a year to burn garbage without producing energy. Surprisingly, the principal reason was the fact that there wasn’t enough urban waste in Delhi.

It turns out that the waste—paper, rags, plastic, etc.—in Delhi produces only about half the caloric value of a Western city. This contrast tells us a lot about the treatment of waste in rich and poor countries and helps us to understand the importance of trade in waste.Poor societies can afford little waste in the traditional sense. Poverty ensures that every bit of a resource is reused, recycled, or otherwise utilized. In India, an enormous army of rag pickers continuously supply millions of trash merchants all over the country. They pick up virtually everything that might have a potential value. The rag-pickers, particularly in urban centers, have an unmatched capacity to extract and sort every bit of material that can be reused, recycled, or have other potential uses.

This commitment to resource utilization pervades almost all strata of society. Families in India willingly wait for weeks in the hope of getting a higher price for their old newspapers. Trash dealers frequent homes on a regular basis to buy newspapers, plastic and glass bottles, discarded furniture, or household gadgets. These are then meticulously sorted and sold for reuse, repair, recycling, resource recovery, and any number of other uses.

The pattern of waste utilization changes from poor rural areas to small towns to big cities. In the smaller and poorer areas, the volume of actual waste is very small, because whatever material can have some possible utility is reused or repaired. Consequently, dealing with waste as an economic activity is minimal. As one moves into towns, waste acquires a more economically vibrant characteristic. Household consumption levels are higher, and so is the quantity of waste. Consequently, there are more trash dealers to exploit the economic potential of the larger volume of wastes.

There are two reasons why recycling in poorer countries like India is so thorough. First, the low value of labor justifies the long hours spent extracting material. For rag-pickers, there are few other ways to earn money. Second, because the country is poor, many products made from virgin raw materials are luxury goods, simply too expensive for most people. Thus, there is a ready market for reused and recycled goods.

The painstaking efforts to recycle materials do not mean that a poor country like India is pollution-free. Indeed, the low quantity of waste generated in an economy with little capital and technological backwardness keeps the waste industry from graduating above small-scale local initiatives. And higher pollution occurs because there isn’t the technology to capture highly dispersed waste such as sulfur dioxide from smokestacks or heavy metals that flow into wastewater.

In contrast to the careful reuse and recycling of waste in poor counties, per capita generation of waste is much higher in wealthy countries (although pollution is lower). This obvious difference is often used to extol the virtues of lower consumption in poor countries and the evils of consumerist lifestyles in the former. But the explanation is more complex.

Rich societies generate more wastes because their citizens can afford to do without the leftovers, whether in the form of food, packaging, worn-out clothes, or energy. Another way of looking at it is that the value of the waste, even while it is substantial in terms of weight or volume, is so small in comparison to individuals’ disposable income that most people find the value of waste (in economic terms, the marginal utility of waste) to be quite low. Many cheap substitutes are of better quality. Many items that are reused in India are thrown away in the United States because they just aren’t worth very much to people who can afford new products.

Does this mean that the economics of waste loses viability as a society becomes richer? It may seem that way, because waste handling is such a big issue in the developed countries. Yet the much greater quantity of wastes generated, along with newer technologies, should make the waste industry more economically rewarding in richer countries.

Indeed, that has been the case, as Pierre Desrochers shows in “The Secret Past of Resource Recovery” (PERC Reports, Sept. 1999, 5-7). He reminds us that there was a flourishing waste processing industry decades before the major environmental statutes were enacted. And even today, a lot of waste, particularly industrial by-products, is sold for processing around the world. .Yet, as western nations grew wealthier, leftovers became more visible. This reflects a problem of institutions (the rules and laws that govern actions). First, there was more pollution because of the "tragedy of the commons." Since people could dump waste on commonly owned or open-access property (such as the air and water), some people didn’t feel the need to develop a waste disposal system. Naturally, this increased the levels of pollution.

Second, the market for wastes and byproducts was not allowed to work to the extent that it could. Wealthy societies have the capability—and frequently the desire—to dispose of waste. They have the wealth to pay people to cart off leftovers rather than seeking payment from the waste disposers, as poorer people do. Under a market system, as societies grow wealthier, this should lead to markets for the disposal of waste in landfills or incinerators.

Unfortunately, rather than privatising the resources, restricting access to them, and allowing markets in waste to develop, government agencies took over the role of regulating and even providing the service of waste processors (often, by owning landfills). Bypassing all evidence of how the private sector had been performing this service economically, the argument was made that private markets couldn’t provide this service.

Without the disciplining influence of the market forces, public agencies became inefficient and began to consider waste a problem, not a potential resource. So efforts were made to regulate or reduce the generation of waste.

Waste can again become a valuable resource if markets are allowed to develop, both within countries and internationally. Free trade in waste would allow the comparative advantage of societies to make waste processing economically viable and efficient. (There are already attempts by some entrepreneurs to hold Internet-based auctions of wastes.)

Rich societies with technological advantage and economies of scale could buy certain wastes from poorer countries where low volume makes processing more expensive. Poorer societies, with lower labor costs, could import other types of waste products from rich countries, augmenting their own low quantity and making processing viable.

Current rules thwart this process. Responding to the international agreement known as the Basel convention, India stopped the import of waste lead and zinc. This was probably economically and environmentally unsound. The low consumption level in India of products such as batteries means that the imported waste is necessary to make recycling viable. Thus, the Basel convention may be contributing to a higher pollution load in developing countries by restricting trade that makes recycling feasible.

Trade creates wealth, and if free trade, including trade in waste, is allowed, someday all countries can become wealthy. What will happen to waste? Not only will some trade in waste continue (as it does in wealthier countries today), but the greater productivity and more advanced technology will ensure reasonably priced disposal of the waste that cannot be traded. Meanwhile, both the economy and the environment will gain if we can bring back to life the much abused cliché 'wealth from waste'